MUNSTER: Four Ideas About Why Apple’s Stock Is Getting Nuked Today

jony ive
Apple hardware designer Jony Ive

[credit provider=”Screenshot from Objectified”]

Apple’s stock is getting unexpectedly smashed today, falling 5 per cent.What gives? We don’t know.

And, frankly, neither does top Apple analyst Gene Munster.

But, he still put out a note with four ideas about what might be hitting the stock.

  1. There was a DigiTimes story that Apple had a 20% quarterly decline in components orders. This doesn’t mean Apple is hosed, says Munster. It’s normal for Apple to cut its orders after the biggest quarter of the year. He runs the maths and says if DigiTimes is right, Q1 iPhone orders should be in line with expectations.
  2. Technicals. We’ll just quote Munster on this one: “Apple’s simple 50 day moving average is nearing its 200 day moving average, which is a negative technical sign. Based on our conversation with Piper Jaffray Technical Analyst Craig Johnson, we believe that for this technical indication, most of the damage has been done to AAPL, but there could be a worst case additional 10% move to the downside which could be the next meaningful area of support.”
  3. Margin requirements going up. We wrote about this earlier, but there’s a report that margin requirements are going up and this is leading some people to sell rather than put up more cash. If this is the case, it has nothing to do with the fundamental health of Apple, says Munster.
  4. China Mobile is going to carry the Nokia Lumia. Some people think this means China Mobile will skip the iPhone. Munster thinks this is not true. He still sees the iPhone getting to China Mobile in the second half of the year.

As you can see, none of these explanations are particularly satisfying.

Munster is still “overweight” Apple with a $900 price target. It’s currently trading around $545.